INDEPENDENT COMPETITION AND REGULATORY COMMISSION
Objectives
The Independent Competition and Regulatory Commission (the Commission) has responsibilities for a range of regulatory matters under the Independent Competition and Regulatory Commission Act 1997 (ICRC Act), the Utilities Act 2000 (Utilities Act) and the Electricity (Greenhouse Gas Emissions) Act 2004.
Section 7 of the ICRC Act provides for the functions of the Commission in relation to ministerially declared regulated industries.  These cover matters such as pricing regulation, access arrangements, utilities regulation, and competitive neutrality complaints.  The ICRC Act sets out the Commission’s objectives as:
•	promoting effective competition in the interests of consumers;
•	facilitating an appropriate balance between efficiency and environmental and social considerations; and
•	ensuring non-discriminatory access to monopoly and near-monopoly infrastructure.
The Utilities Act provides for the regulation of electricity, natural gas, water, and sewerage utility services.  In discharging its responsibilities under this legislation, the Commission’s objectives centre on:
•	encouraging the provision of safe, reliable, efficient and high-quality utility services at reasonable prices;
•	minimising the potential for misuse of monopoly power in the provision of utility services and promoting competition in the provision of utility services;
•	encouraging long-term investment, growth and employment in utility services; and
•	protecting the interests of consumers.
The Electricity (Greenhouse Gas Emissions) Act 2004 establishes the ACT’s Greenhouse Gas Abatement Scheme the purpose of which is to reduce greenhouse gas emissions associated with the production and use of electricity, and to encourage participation in activities to offset the production of greenhouse gas emissions.  The Commission is the scheme regulator. 
2008‑09 Priorities
The strategic and operational issues to be pursued in 2008‑09 include:
•	overseeing new pricing arrangements for water and wastewater services from 1 July 2008;
•	overseeing new pricing arrangements for retail electricity from 1 July 2008;
•	determining electricity sector benchmarks for, and reporting on compliance with, the Greenhouse Gas Abatement Scheme in the ACT; 
•	monitoring and reporting on utility compliance and performance under the Utilities Act; and
•	working cooperatively with the national regulatory body, the Australian Energy Regulator, to put in place orderly arrangements for the transfer of regulatory responsibilities in the energy sector as agreed under the COAG Australian Energy Market Agreement.
Estimated Employment Level 
2007-08
Budget			2007-08
Est. Outcome	2008-09
Budget	
6		Staffing  (FTE)	6	5	

Changes to Appropriation
Changes to Appropriation						
 	2007-08	2008-09	2009-10	2010-11	2011-12	
Government Payment for Outputs	Est. Out.	Budget	Estimate	Estimate	Estimate	
 	$'000	$'000	$'000	$'000	$'000	
						
2007-08 Budget	 - 	 - 	 - 	 - 	 - 	
						
2008-09 Budget Policy Adjustments 						
Implementation of Energy Industry Levy - Compliance and Regulation 	 - 	471	485	499	514	
						
2008-09 Budget	 - 	  471	  485	  499	  514	

Independent Competition and Regulatory Commission	
Operating Statement	
  2007-08			  2007-08	   2008-09		  2009-10	  2010-11	  2011-12		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		Income								
		Revenue								
0		Government Payment for Outputs	0	471	#	485	499	514		
1,090		Taxes Fees and Fines	2,110	516	-76	531	547	563		
0		User Charges - Non ACT Government	604	0	-100	0	0	0		
839		User Charges - ACT Government	839	844	..	871	876	904		
46		Interest	82	47	-43	47	27	27		
1,975		Total Revenue	3,635	1,878	-48	1,934	1,949	2,008		
		Gains								
0		Total Gains	0	0	-	0	0	0		
1,975		Total Income	3,635	1,878	-48	1,934	1,949	2,008		
		Expenses								
742		Employee Expenses	447	511	14	522	573	575		
151		Superannuation Expenses	71	75	6	77	77	77		
1,054		Supplies and Services	3,089	1,255	-59	1,284	1,248	1,305		
13		Depreciation and Amortisation	13	13	-	13	13	0		
0		Other Expenses	0	14	#	14	14	14		
1,960		Total Ordinary Expenses	3,620	1,868	-48	1,910	1,925	1,971		
15		Operating Result	15	10	-33	24	24	37		

Independent Competition and Regulatory Commission	
Balance Sheet	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/08			as at 30/6/08	as at 30/6/09	   Var	as at 30/6/10	as at 30/6/11	as at 30/6/12		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
796		Cash and Cash Equivalents	1,619	1,653	2	1,697	1,741	1,785		
227		Receivables	48	48	-	48	48	48		
1,023		Total Current Assets	1,667	1,701	2	1,745	1,789	1,833		
		Non Current Assets								
39		Property, Plant and Equipment	39	26	-33	13	0	0		
39		Total Non Current Assets	39	26	-33	13	0	0		
1,062		TOTAL ASSETS	1,706	1,727	1	1,758	1,789	1,833		
		Current Liabilities								
374		Payables	573	572	..	572	572	572		
239		Employee Benefits	97	102	5	103	103	103		
2		Income Tax Payable	0	0	-	0	0	0		
615		Total Current Liabilities	670	674	..	675	675	675		
		Non Current Liabilities								
13		Employee Benefits	7	14	100	20	27	34		
13		Total Non Current Liabilities	7	14	100	20	27	34		
628		TOTAL LIABILITIES	677	688	2	695	702	709		
434		NET ASSETS	1,029	1,039	1	1,063	1,087	1,124		
		REPRESENTED BY FUNDS EMPLOYED								
434		Accumulated Funds	1,029	1,039	1	1,063	1,087	1,124		
434		TOTAL FUNDS EMPLOYED	1,029	1,039	1	1,063	1,087	1,124		

Independent Competition and Regulatory Commission	
Cash Flow Statement	
  2007-08			  2007-08	   2008-09		  2009-10	  2010-11	  2011-12		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
0		Cash from Government for Outputs	0	471	#	485	499	514		
1,090		Taxes, Fees and Fines	1,760	516	-71	531	547	563		
839		User Charges	1,443	844	-42	871	876	904		
46		Interest Received	82	47	-43	47	27	27		
83		Other Revenue	83	83	-	86	86	86		
2,058		Operating Receipts	3,368	1,961	-42	2,020	2,035	2,094		
		Payments								
880		Related to Employees	505	575	14	592	643	645		
1,047		Related to Supplies and Services	2,732	1,254	-54	1,283	1,247	1,304		
98		Other	98	98	-	101	101	101		
2,025		Operating Payments	3,335	1,927	-42	1,976	1,991	2,050		
33		NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES	33	34	3	44	44	44		
33		NET INCREASE/(DECREASE) IN CASH HELD	33	34	3	44	44	44		
763		CASH AT BEGINNING OF REPORTING PERIOD	1,586	1,619	2	1,653	1,697	1,741		
796		CASH AT THE END OF THE REPORTING PERIOD	1,619	1,653	2	1,697	1,741	1,785		

Independent Competition and Regulatory Commission	
Statement of Changes in Equity	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/08			as at 30/6/08	as at 30/6/09	   Var	as at 30/6/10	as at 30/6/11	as at 30/6/12		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
419		Opening Balance	1,014	1,029	1	1,039	1,063	1,087		
		Accumulated Funds								
15		Operating Result for the Period	15	10	-33	24	24	37		
		Reserves								
15		Total Income And Expense For The Period	15	10	-33	24	24	37		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
434		Closing Balance	1,029	1,039	1	1,063	1,087	1,124		
Notes to the financial statements
Significant variations are as follows:
Operating Statement
•	government payment for outputs:  the increase of $0.471 million in the 2008‑09 Budget from the 2007‑08 estimated outcome represents the introduction of the energy industry levy, which replaces the utility licence fees for energy sector (electricity and gas) distribution and supply services from 2008‑09 onwards.  
•	taxes, fees and fines:  
–	the increase of $1.020 million in 2007‑08 estimated outcome from the original budget relates to the collection of unbudgeted license fees; and
–	the decrease of $1.594 million in the 2008‑09 Budget from the 2007‑08 estimated outcome is attributable to the introduction of the energy industry levy for local regulatory costs. 
•	user charges – non ACT Government:  the increase of $0.604 million in the 2007‑08 estimated outcome from the original budget and the decrease of $0.604 million in the 2008‑09 Budget from the 2007‑08 estimated outcome represents the recovery of costs for the water pricing review. 
•	interest:  
–	the increase of $0.036 million in 2007‑08 estimated outcome from the original budget is attributable to a higher level of cash reserves; and
–	the decrease of $0.035 million in the 2008‑09 Budget from the 2007‑08 estimated outcome is attributable to the anticipated lower cash reserves.  
•	employee expenses:  the decrease of $0.295 million in the 2007‑08 estimated outcome from the original budget is attributable to lower than expected staffing levels through part of the financial year due to difficulties with filling positions.  
•	supplies and services expenses:  
–	the increase of $2.035 million in 2007‑08 estimated outcome from the original budget is due to an increase in overall regulatory compliance costs, and to the costs of consultants used in the water pricing review; and
–	the decrease of $1.834 million in the 2008‑09 Budget from the 2007‑08 estimated outcome is attributable to the introduction of the energy industry levy and the consequent change in funding arrangements for the Essential Services Consumer Council and the technical regulator, the ACT Planning and Land Authority.
Balance Sheet
•	cash and cash equivalents:  the increase of $0.823 million in the 2007‑08 estimated outcome from the original budget is mainly due to the flow on effects of higher cash reserves from operations reflected in the 2006‑07 audited result. 
•	receivables:  the decrease of $0.179 million in 2007‑08 estimated outcome from the original budget is attributable to a higher level of collections from debtors. 
•	payables:  the increase of $0.199 million in 2007‑08 estimated outcome from the original budget is due to increased consultant costs in relation to the water pricing review. 
•	current and non-current employee benefits:  
–	the decrease of $0.147 million in 2007‑08 estimated outcome from the original budget reflects the departure of a number of employees during the year who had accrued large benefits; and  
–	the increase of $0.012 million in 2008‑09 Budget from the 2007‑08 estimated outcome reflects the normal accrual of long service leave and annual leave entitlements.
Statement of Changes in Equity
Variances in the statement are explained in the notes above.